Wednesday 22 May 2019 4:50 pm

Forex trading director spent client money on luxury lifestyle, court finds

The High Court has ordered a forex trading company and its director to pay a £917,231 fine after it found investors were scammed and the proceeds spent on luxury goods and cryptocurrencies.

The High Court declared that Xcore Capital and its director Jonathan Chitty, 27, from Surrey, had carried on an unauthorised investment scheme which took over £1m in investors’ money.

Consumers gave money to Xcore on the promise of a six per cent annual return generated through forex and equity trading.

However, the majority of the money was used to fund an office in Mayfair, brokers’ wages and Chitty’s luxury lifestyle.

Read more: More than £27m lost in forex and crypto investment scams last year

Chitty’s personal spending included £102,000 on cryptocurrencies, £58,000 on luxury goods, £24,000 on a Rolex watch and £20,000 towards his wedding.

The order declared that Xcore ran a deposit taking scheme without the necessary authorisation by the Financial Conduct Authority and that Chitty was knowingly concerned in the scheme.

It orders Xcore and Chitty to pay the FCA £917,231 which is the full value of sums owed to consumers.

The FCA will distribute any funds it recovers to consumers.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: "Prompt action by the FCA stopped this scheme in its tracks and prevented victims incurring much greater losses.

Read more: Barclays and RBS among five banks hit with €1bn fine for forex rigging

"Consumers should be especially wary when contacted out of the blue about an investment opportunity, and about financial services firms offering investment opportunities without FCA authorisation. If they’re not authorised, it’s probably a scam."

On 20 November, the High Court had imposed a freezing order on Xocre and Chitty’s assets which remains in place until further order of the court.

Xcore and Chitty could not be reached for comment.